Why data-driven IT departments are leading digital business transformation in 2023

Facing increasing cost pressures and the threat of a continued economic downturn, IT departments are shifting. Today, the forward-thinking IT department is looking at data-driven approaches to lead digital business transformation within their organization.

To succeed, IT teams are becoming less siloed, working closely with other areas of the business. There’s more collaboration with marketing teams, for example, in identifying technologies that help to collect, use and leverage technical solutions.

Understanding the pressures and priorities IT departments are facing can help make informed technologies. The good news is that despite, or perhaps because of, recessionary concerns, many organizations are committed to increasing technology budgets.

The state of IT spending, priorities, and goals in 2023

In one 2023 State of IT report, Spiceworks’ Ziff Davis lays out some of the trends that IT, technology and data leaders see for the year. The report is based on a survey of more than 950 IT leaders in North America and Europe. The main takeaway is that most organizations (83%) are worried about a recession in 2023, but maintain optimism alongside their concerns. In fact, as many as 58% of brands (even accounting for the economic outlook) expect to see year-over-year revenue increases. 

Much of this growth is led by IT teams, and their insistence on continued tech investments.

For one, IT departments are making the case for prioritizing the right tooling, despite recessionary concerns. About half of the businesses surveyed plan to increase IT spending in 2023, with only 6% planning a reduction. A closer look at where IT departments plan to spend reveals a closer reliance on data and efficiency.

• The pandemic, and the valuable role IT played in surviving it, has shifted the view of technology. It is no longer seen as a cost center but rather as a way to foster growth and improve productivity.
• In an economic slowdown, technology can be a boon, allowing for maximum efficiency and even allowing those with flat or contracted budgets to do more with less.
• One primary growth area is managed services, both cloud and on-premises solutions. Managed business applications, security and hosting were among the key drivers. Overall, spending in managed services will rise to 18% of IT budgets, up from 15% before the pandemic.

Here’s what data-driven IT teams are getting right (and will continue to benefit from).

1. CIOs see continued growth in their tech budgets, especially in data and customer experience.

In 2023, we’re seeing an increasing intersectionality of technology and data. Data analysis, privacy and customer experience are among the key areas where CIOs expect to be more involved this year. Plus, data and business analytics, and customer experience technologies, are among the top drivers of increased IT investment.

The role of IT in business success and transformation seems to be shifting as well.

• Seventy-seven percent of business leaders agree that the CIO role will continue to have heightened visibility due to the state of the economy
• Another 38% see the CIO as a strategic advisor, able to identify needs and opportunities when it comes to digital and business transformation

The pressure is clearly on CIOs and other IT leaders, according to Gartner’s report on the top technology trends for 2023.

According to Gartner, 76% of teams responsible for creating digital products are also responsible for creating revenue. Yet the traditional software development cycle makes it challenging to build products that can scale while being secure and stable.

To combat the development challenge, Gartner has coined the phrase digital immunity. The premise is to bring multiple practices to the application development lifecycle. Analytics, AI and other tools improve application testing and provide end-to-end supply-chain security. The digital immunity approach, coupled with applied observability, can lead the way to new mindsets. For data-reliant tasks, such as revenue-generating marketing, organizations need solutions that apply the same principles.

2. Data-driven organizations see 2.5x better business results and are twice as efficient.

Why should data be at the top of your technology investments in 2023? Because investing in data-related systems and technologies delivers results.

A recently released white paper by IDC showed the power of truly data-driven organizations. Such organizations saw two and a half times better results across multiple business metrics.

• For companies that were leaders in data and analytics, there was a three-times-higher growth in revenue.
• They were also three times more likely to have smaller time-to-market times.
• In addition, they were twice as likely to report improvements in profits, customer satisfaction and operational efficiency.

How do these companies achieve such results? According to IDC, it’s about a foundational organizational shift. Successful organizations create a data-driven culture that permeates every unit, division and employee. There’s also data transparency, with business units that needing data having access to it in the way they need it.

The process is called data democratization and to do it right means strategic investments in the right technologies. It takes a thoughtful approach to data collection and selecting the right data platforms. Those systems must allow for transparent yet secure access to data with powerful tools that leverage the information contained therein.

And there is a major risk to getting it wrong. 

Per data from IDC, the contrast between the most mature organizations and those at the bottom is striking. Among the other findings:

• 98% of mature firms report good-to-excellent understanding of friction points on the customer journey. Only 29% of the least mature organizations report the same.
• Among top-performing teams, more than 80% have fully automated data validation, well-defined access policies and control of data management.
• In the most mature organizations, 84% of teams get answers in minutes or hours.
• Leaders of mature organizations are 2x as likely to say it’s “easy” to leverage data for personalization.
• 76% of top organizations report having a single source of truth for their data compared to 3% of the least mature.

3. Data worries persist, driving priorities around privacy and security. 

The 2023 State of Data Engineering Survey from Immuta shows the persistent concerns about data and data security many IT leaders feel. The survey indicated more than half of respondents support data security initiatives. However, 90% also said they could have a better understanding of link between security and access control.

Those worries may be why IT leaders have been seen as data gatekeepers, seeking to be overly involved in accessing, managing and manipulating data. In areas such as marketing, where the demand for real-time data is ever-present, that’s problematic. It’s also why strong, trusting partnerships are necessary for CIOs and other IT leaders to be successful.

The misalignment of data access and security is one of the most vexing. The most common reasons cited are:

• Not enough staff to analyze and manage data (41%)
• Too much data (36%)
• Inability to access data when needed (34%)
• Lack of tools to manage data and data access (33%)
• Inaccessibility to the right data (31%)

The consequences of these disconnects are significant. Nearly nine out of 10 respondents (89%) said their organizations miss business opportunities due to data access challenges. These lost opportunities include the inability to help a customer, innovate, or fix critical issues. Other cited losses include an inability to launch a new product, losing sales to a competitor and missed quarterly goals.

IT-led digital business transformation: Made simple with Lytics

Lytics offers data-driven technologies that help marketers and IT teams deliver both digital and business transformation. Lytics tools harness the potential of data with insights, analysis and security. Here’s a closer look at Lytics products designed to provide organizations with data-centricity and return on technology investment.

Conductor

Conductor lets you connect your data across platforms and channels, with pre-built schemas that let you manage customer identities based on multiple touchpoints. With Conductor, you remain compliant with regulatory mandates such as the European Union’s General Data Protection Regulation (GDPR). As you add more data, identifiers and profiles, you can manage and update schema to incorporate the latest information.

Cloud Connect

With Cloud Connect, you can build campaign segments that allow you to create personalized marketing messages based on past behaviors, and synchronize your data warehouse across hundreds of applications (from social media to analytics tools to email distribution). Query segments in your data warehouse directly from Cloud Connect and deliver them instantly to your ad platform. With highly specific segmentation capabilities, you’ll have more accurate audience targeting and a stronger marketing ROI.

Decision Engine

Fueled by AI, Decision Engine analyzes customer interactions to give you deeper behavioral insights. Use these insights to create more relevant, personalized messages that dig deeper than basic demographics. Decision engine delivers content recommendations and insights designed to improve retention rates.

What’s next?

With a data-first approach, IT can drive digital business transformation for their organization and its processes. It can also reshape the way the organization thinks and acts.

With a new mindset in place, IT can lead in the training of employees, about data usage, compliance and security. The challenge that remains is how to organize and use data, especially when it comes from different sources and in different formats. Data architectures and formats are often inconsistent, creating a challenge when trying to create a single source of truth for your data. Integrating, formatting and verifying data is increasingly critical, especially given changes in the way information is regulated globally.

IT and marketing are at the forefront of digital innovation that drives revenue and transforms organizations, and aligning around the value of data is just the beginning.